(I wrote this back in 2012.)
From the Harper’s Index in the Sept 2012 Harper’s magazine:
Percentage change since 1970 of metropolitan American families residing in affluent neighborhoods: +121
Residing in poor neighborhoods: +108
Residing in Middle Class neighborhoods: -34
The math is brutal. There are more than twice as many–almost two and a half times as many–affluent households now than there were in 1970. There are over twice as many poor households as they were in 1970. And the number of middle class households is down a whole third. If you consider that the country’s total household wealth is fairly fixed over time, you can see how this happened. The upper class has increased their share by taking it from the middle class. Their increased wealth didn’t come out of nothing. It’s not like there was a Gold Rush that increased the money supply several fold over night. Nope. It’s just that the salary structure and profit taking and were fundamentally altered so that most of that cash went to the rich and upper middle classes (who are now the lowest rung of the affluent class.) They’ve locked in this bias, too–when the recession hit, a catastrophe that they themselves brought about, the upper class–the top 20%–suffered almost not at all. All the pain was born by the middle and lower classes, especially the middle class, who have been so stripped of cash that they can no longer even afford to be middle class. That’s what has made this downturn so devastating, and why the middle class can’t seem to recover: there’s no money for us. Almost all of the benefits of the recovery have gone to the top twenty percent.
The redistribution of wealth in this country has been profound–one of the greatest economic shifts in our history. The recession made that gulf even wider, and hardened it–a process that continues. There can’t be a reversal of this trend for a generation or two, it has been too profound a transfer for a quick fix. The middle class of even twenty years ago will not regain their position, not in their lifetimes. Our best years are long behind us. So we’ve adapted. We live poorer, spend less. We live in a totally separate world from the top twenty per cent. The businesses that succeed nowadays are ones that cater to the twenty percent. Businesses that cater to the middle class are prone to failure.
I don’t see a way out. We’ve lost the class war. Got our asses whipped before we even realized that there was a class war.